Renewing your health insurance used to be easy. Now it seems to take all year. Your employees seem to be healthy, but your renewal rates disagree. You contact your old consulting firm. Utilization is too high…again. Emergency room visits are too frequent…again. Generic prescription substitution is too low…again. You are told to increase co-pays and raise deductibles to create the necessary “steerage” to help hold down your health care costs. The result? Double-digit premium increases…again. You are reminded of the definition of insanity: doing the same thing over and over again expecting different results.

What other options are there?

By now you’ve heard of “consumer-driven” health care plans. At this time there are two versions showing promise, Health Reimbursement Arrangements (HRA) and Health Savings Accounts (HSA). They are designed to lower health insurance costs by engaging employees to take a vested interest in their own health care expenses.

There are significant differences between how these plans work. The employer is the owner of the HRA. The more successful HRA plans are designed to allow a portion of the unspent accounts to roll over from year to year as an incentive to the employee not to spend them. There are no requirements for which type of insurance you use with an HRA. The money that is not spent stays with the employer if an employee leaves.

The employee is the owner of their HSA. Both the employer and the employee can fund this account. HSA funds can be used to help offset all medically related expenses including a tremendous number of things that do not count towards the insurance deductible such as dental, vision, and even some over-the-counter medications. In order to establish an HSA the employee must be covered exclusively by a High Deductible Health Plan (HDHP). The federal government has placed specific guidelines for deductibles and out-of-pocket maximums for these plans to be qualified. Since these plans have a higher deductible than most co-pay plans there is usually a significant premium savings. The concept is to place the premium savings in the tax deductible HSA account and use these dollars to pay your smaller expenses at the insurance company’s negotiated PPO discount while maintaining the insurance plan for major expenses. There are now many examples of the premium savings being large enough to cover most or all of the HDHP deductible!

The HSA accounts can be opened through local banks and credit unions. As long as your HSA qualified health insurance plan is effective by December 1st 2012 you have until April 15th of the following year to deposit up to $3,100 individual or $6,250 family into an HSA account for 2012 and $3,250 individual or $6,450 family for 2013. If you are 55 or over then you can deposit an additional $1000. Account balances roll over year to year. HSAs are the only products that offer triple tax advantages; tax-deductible deposits, tax-free interest earned, and tax-free withdrawals as long as they are spent on qualified medical expenses. Since the employees own their HSA account there is a significant difference in how this money is spent. Imagine your employees all having a vested interest in not spending their health care dollars. This is why self-funded plans tend to benefit most.

The city of Iola, KS is a perfect example. They switched all of their employees to an HSA plan in 2004. Their utilization has decreased substantially which has allowed the city to deposit half of the employee’s individual deductible into their HSA account each year. Employees have embraced the new plan and are seeing their HSA not as an entitlement to be spent but as a retirement account that should be saved whenever possible. The city now has their health insurance costs in check.

The new generation of consultants will need to be focused on educating businesses and their employees offering workshops and educational tools to help employees understand how these plans work.

Since this blog is dedicated to offering the most up-to-date Health Savings Account information, we want to make sure you maximize your HSA for 2011. Remember, if you were covered by an HSA qualified High Deductible Health Plan (HDHP) on or before December 1st, 2011 then you have until you file your taxes (or April 17th 2012) to finish up your 2011 contributions and get a 2011 tax deduction.

These maximum contributions will not be pro-rated if your HSA qualified health insurance plan (HDHP) was either in force all 12 months of 2011 OR if it was in force by December 1st of 2011 AND remains in force all 2012.

Your tax deduction is based on how much you DEPOSIT into your HSA, not how much you spend.

You are required to keep receipts of your eligible expenses in case the IRS audits you. You can choose to reimburse yourself at a later date up to the medical receipts you have accumulated without being subject to 20% penalty or taxable income.

The triple-tax advantages (tax deductible deposits, tax free interest earned, and tax free withdraws for eligible medical expenses) only available with HSAs make them an important tax planning tool that is unmatched when used properly.

Other statistics show that nearly half of the 11 million Americans covered by the required HDHP insurance plans have not established their HSA account, and therefore are not participating in the tax savings they offer. Although OFM Benefits is one of the nation’s premier HSA focused insurance agencies, there are probably some of you that have procrastinated setting up your account.

OFM is proud to recommend HSA Bank because of their great combination of low fees, competitive interest rates, and a large number of investment options. With over 400,000 HSA accounts and over $1 billion in HSA deposits, HSA Bank has established themselves as one of the nations leading HSA administrators. They also recently eliminated all setup fees.

As many Americans are facing huge health insurance premium increases and revenue decreases, HSA qualified plans are becoming even more popular. The average household pays over $15,000 per year for health insurance premiums! We feel HSA qualified plans offer the best value in healthcare today.

If you are self employed or a business owner and would like to receive the premium savings and tax deductions only available with HSAs, please visit www.missionHSA.com

So you finally switched to an HSA qualified High Deductible Health Plan (HDHP). You love the lower health insurance premiums these plans offer. However, life happened and you didn’t get around to setting up your Health Savings Account (HSA). Now you are sitting there with a medical bill you need to pay, and you remember the triple tax advantaged HSA account that allows you to pay for HSA qualified eligible medical expenses with tax deductible money.

Unfortunately the HSA account needed to be established BEFORE the expense was incurred to be an HSA eligible expense.

HSA Bank was one of the very first financial institutions that recognized the importance of Consumer Driven Health Plans. They opened their first Medical Savings Account in 1997. They currently have nearly 400,000 HSA accounts holding over $1 billion in HSA deposits.

Nobody knows for sure how many people are eligible to set up an HSA and have yet to do so. It only takes a few minutes and it could save you a lot of money on your next tax return.

Since this blog is dedicated to offering the most up-to-date Health Savings Account information, we want to make sure you maximize your HSA for 2010. Remember, if you were covered by an HSA qualified High Deductible Health Plan (HDHP) on or before December 1st, 2010 then you have until you file your taxes (or April 15th 2011) to finish up your 2010 contributions and get a 2010 tax deduction.

These maximum contributions will not be pro-rated if your HSA qualified health insurance plan (HDHP) was either in force all 12 months of 2010 OR if it was in force by December 1st of 2010 AND remains in force all 2011.

Your tax deduction is based on how much you DEPOSIT into your HSA, not how much you spend.

You are required to keep receipts of your eligible expenses in case the IRS audits you. You can choose to reimburse yourself at a later date up to the medical receipts you have accumulated without being subject to 20% penalty or taxable income.

The triple-tax advantages (tax deductible deposits, tax free interest earned, and tax free withdraws for eligible medical expenses) only available with HSAs make them an important tax planning tool that is unmatched when used properly.

Other statistics show that nearly half of the 10 million Americans covered by the required HDHP insurance plans have not established their HSA account, and therefore are not participating in the tax savings they offer. Although OFM Benefits is one of the nation’s premier HSA focused insurance agencies, there are probably some of you that have procrastinated setting up your account. If you have been covered by your HDHP before or on December 1st, 2010 and haven’t set up your HSA, it’s not too late!

OFM is proud to recommend HSA Bank because of their great combination of low fees, competitive interest rates, and a large number of investment options. With over 350,000 HSA accounts and over $1 billion in HSA deposits, HSA Bank has established themselves as one of the nations leading HSA administrators. They also recently eliminated all setup fees.

As many Americans are facing huge health insurance premium increases and revenue decreases, HSA qualified plans are becoming even more popular. The average household pays over $13,000 per year for health insurance premiums! We feel HSA qualified plans offer the best value in healthcare today.

If you are self employed or a business owner and would like to receive the premium savings and tax deductions only available with HSAs, please visit www.missionHSA.com

As most of you know I have been a frequent guest on other talk radio shows for over 3 years now. We (finally) decided it was time to take on a full hour every Saturday morning.Dave Ramsey tells everybody to get an HSA three hours a day five days a week, but people still don’t understand them. As the Endorsed Local Provider (ELP) here in Kansas City for Dave Ramsey listeners we feel education is the key. If people fully understood just how much premium can be saved with an HSA qualified High Deductible Health Plan (HDHP) along with the triple tax advantages only available with an HSA then everybody would want one!

One hour every Saturday morning is a good start…

Be sure to tune in to the live show between 7 and 8 central time Saturday mornings here in Kansas City on KCMO Talk Radio 710 or on the internet at www.710KCMO.com. Feel free to call in to the radio show at 913-576-7710 with specific questions about HSAs, HRAs, FSAs, individual or group health insurance.

Click here to access our podcast page where you can listen to or download our most recent shows.

Here are the podcasts of some of our shows along with a listing of the Business of the Week (BOTW)

Of course you can call our office at any time (913-432-2732 ext. 1) or visit our website www.missionHSA.com if you want to see just how an HSA qualified health insurance plan would work for you or your business. We look forward to hearing from you!

My name is Scott Borden I am a self-employed independent health insurance agent. I purchase health insurance for my family of 5. If I worked for a big company they would be paying for a portion of my health insurance. There are advantages and disadvantages to being self-employed. No help for health insurance is a big disadvantage.

Is there a smart way to purchase health insurance without breaking the bank?

There are millions of self-employed Americans out there facing the same situation. Over the past 12 years since I first found Medical Savings Accounts (MSAs), I have worked with hundreds of health insurance agents trying to get them to recommend the lower cost Health Savings Account (HSA) qualified plans to self-employed people and businesses. Still today very few health insurance agents agree with me. The most common complaint I hear from agents is that HSAs are too confusing and too complicated. People just don’t understand them. They are too risky. You name it, I’ve heard it all.

Are HSAs really difficult to understand?

I’ll let you decide…

Which health insurance plan should I choose for my family of 5 living in Kansas?

Plan 2: Humana Autograph Total + Rx HSAMonthly premium $422
$7,000 family calendar year deductible
Maximum out-of-pocket $7,000 per family
Take premium savings ($353/month) and deposit into HSA
Use HSA to pay smaller bills
If I don’t spend my HSA ($4,236 in the first year), I keep it.
The way I see it, the first $4,236 of all my medical bills are “paid” at 100% with money that would have gone to the insurance company!

Which is more confusing? That wasn’t very difficult to understand, now was it. Plan 2 simply requires a deductible be satisfied then covers all remaining expenses including inpatient, outpatient, physician visits, and prescription drugs for my entire family at 100% for the rest of the calendar year.

Which would be the best to own in a healthy year?

The lower premium plan always saves money in a healthy year.

Which would be the best to own should I come down with a major disease?

In order to decide which plan “would be the best” we have to calculate which plan would cover the disease at the lowest out-of-pocket expense. Does my monthly premium play a role in this calculation? ABSOLUTELY!

With Plan1 we have to know how many physician visits, how many prescription drugs, how many outpatient treatments, how many emergency room visits, was surgery involved, etc. The policy claims “$2,500 maximum out-of-pocket per person” but unfortunately that didn’t include the co-pays. It is possible in this type of a situation to have literally thousands of dollars worth of co-pays above and beyond the “$2,500 maximum out-of-pocket”

So even if a major claim occurs in the first year, the HSA qualified plan works best!

Once again – requires a little study and math, but not very difficult.

Once money starts accumulating in the HSA then feel free to go to a higher deductible which saves even more money. This grows my HSA even faster!

Unfortunately most health insurance agents don’t want to take the time to educate the public on a lower cost way of managing health care expenses. The lower monthly insurance premiums results in lower commissions. Why should they work harder to make less? As long as 95% of the public is willing to keep paying rediculous health insurance premiums they will keep on selling them.

If I hear one more health insurance agent saying HSAs are too complicated for people to understand I am going to…
I feel much better now!

What Is An HSA?

A Health Savings Account (HSA) is a tax-deductible account to which you can contribute to save for future medical expenses or to pay for any day-to-day, qualified medical expenses permitted under federal tax law...[More]

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